Cencorp
Cencorp
- ISIN: FI0009006951
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Nachricht vom 08.05.2012 | 16:15
Cencorp Corporation's Interim Report 1 January - 31 March 2012
Cencorp
08.05.2012 16:15
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NET SALES AT THE SAME LEVEL AS IN 2011, PROFITABILITY IMPROVED
Cencorp Corporation Interim Report 8 May 2012 at 17:15 Finnish time
Cencorp Corporation's Interim Report 1 January - 31 March 2012
NET SALES AT THE SAME LEVEL AS IN 2011, PROFITABILITY IMPROVED
SUMMARY
-The figures in brackets are comparison figures for the corresponding period in
2011, unless stated otherwise.
January-March 2012
-Cencorp Group's net sales were EUR 5.7 million (EUR 5.7 million).
-The order book at end of March stood at approximately EUR 4.3 million (EUR 7.4
million).
-EBITDA was EUR 0.4 million (EUR -1.4 million).
-Operating result was EUR -0.5 million (EUR -2.3 million).
-The EBITDA and operating result include a non-recurring sales profit of EUR
1.1 million.
-The Group's result before taxes amounted to EUR -1.0 million (EUR -3.0
million).
-Earnings per share were EUR -0.003 (EUR -0.01).
-The equity ratio at the end of March was 55.5 percent (54.1%).
-The Laser and Automation Applications segment's net sales decreased by 25
percent to EUR 2.5 million (EUR 3.4 million) and its operating result was EUR
-0.8 million (EUR -0.9 million).
-The Special Components segment's net sales increased by 31 percent to EUR 3.1
million (EUR 2.4 million) and its operating result improved to EUR 0.2 million
(EUR -1.4 million).
-The Special Components segment's operating result includes a non-recurring
sales profit of EUR 1.1 million following the sale of the Beijing plant
building. Cencorp continues its operations at the same premises as lessee.
Outlook for 2012 unchanged
Despite the uncertain economic situation, Cencorp estimates its net sales to
increase compared to 2011 and the full-year EBITDA is estimated to be positive
provided that no essential change takes place in the operating environment or
in the current economic outlook.
President and CEO Iikka Savisalo:
'The Group's net sales remained at the same level as in the first quarter of
2011, although the sales of laser and automation solutions decreased by one
quarter, compared to the January-March period in 2011. The decrease in the net
sales was due to a weak demand at the end of the year 2011. At the beginning of
2012, the demand shows moderate signs of recovery. We managed to significantly
increase the sales of our special components. Most of all, the sales were
increased due to a new customer relationship with a major electronics company.
Utilizing Cencorp's decoration technology has created several new projects with
the same customer.
The Group's profitability improved year-on-year. However, the result includes a
non-recurring sales profit of EUR 1.1 million following the sale of the plant
building. Our operational profitability has not yet reached the targets set by
the Board of Directors. Our main goal in the short and medium terms is to
improve the company profitability.
Cencorp announced its new strategy on 19 April. The new strategy's main focus
in the Laser and Automation Applications segment is on the life cycle
management of customers' automation systems and equipment and in the medium
term on Cleantech applications development. Company's research and development
related e.g. to LED and fuel cell applications has improved remarkably.
Cencorp believes that the decoration business located in Guangzhou requires
investments and the company has stated in its strategy that the decoration
business is no longer part of its core business. To be able to focus on its
core business, the company has started negotiations to find a strategic partner
in the decoration operations. Alternatively, Cencorp investigates different
options to exit from the decoration business.
Cencorp has high future expectations of the Special Components segment and its
flexible circuit production located in Beijing. The company has established an
investment to produce new type of flexible circuits to meet the needs of
customers operating in renewable energy business. With the investment, the
company will be able to fast increase its production capacity of the
application the company informed of in January 2012.
The new strategy requires considerable restructuring in the organisation. The
company has announced that it starts statutory negotiations in all its offices
in Finland. The restructuring will also concern Cencorp's operations in China
and the US.'
GENERAL
The interim report has been drawn up in compliance with the IAS 34 Interim
Financial Reporting standard. In the interim report, Cencorp has applied the
same accounting principles as in the annual report 2011.The interim report has
not been audited.
More information on events that have taken place during the reporting period
can be found in the stock exchange releases published on Cencorp's website at
www.cencorp.com. At the same address, you can also find the flagging
notifications concerning changes in ownership according to the Securities
Markets Act.
Cencorp is part of the Finnish Savcor Group. Savcor Group Oy owned on 31 March
2012 34.8 percent of Cencorp. On 20 April 2012, Savcor Group Oy announced that
it has acquired AC Capital's subsidiary AC Invest B.V., who owned approximately
five percent of Cencorp Corporation's shares resulting in Savcor Group Oy's
ownership increasing into 39.9 percent. Savcor Group Limited owns 39.0 percent
of Cencorp.
SEGMENT-BASED REPORTING
Cencorp's reporting is based on two business segments. The business segments
are Laser and Automation Applications, and Special Components. The Laser and
Automation Applications segment comprises Cencorp's former business and the
Special Components segment the business acquired through the Face (Telecom)
transaction in 2010.
FINANCIAL DEVELOPMENT IN JANUARY-MARCH 2012
Operating environment
Cencorp operates in industries applying electronics and renewable energy
technology (Cleantech). Its main geographical market areas are Europe, North
America, South America and Asia. Cencorp's key customers for laser and
automation applications operate globally and require local service. The global
electronics industry, including the manufacture of mobile phones, is mostly
concentrated in Asia, the domestic market area for the special components
manufactured by Cencorp.
At the end of 2011, Cencorp's automation and laser applications customers were
carefully estimating the general development of the global economy. This
resulted in a weaker demand for Cencorp's products, as well as in a decrease in
net sales in the first quarter of 2012, compared to the same period in 2011.
Especially, deliveries of new machines were declined compared to the first
quarter of 2011. However, demand for services related to the life cycle
management of laser and automation systems and equipment offered by Cencorp
continued to grow. According to the company estimate, the on-going uncertainty
in the global economy and scarce financing for production line investments
create a favorable environment for further developing the life cycle services,
as stated in the company strategy.
In the special components business, Cencorp has clearly decreased the
dependence on the demand of the customers operating in the telecom sector. In
the first quarter of the year, the company has successfully launched two new
products which will significantly grow the market potential available for
Cencorp. In addition, the company is developing several products for the
Cleantech business. The successful launch of these products will guarantee a
remarkable growth potential for the company over the coming years.
The market for renewable energy applications continued to grow, even though
their share of the total energy applications market still remains minor.
Cencorp has strengthened its position in this market. Cencorp is able to
provide this industry sector with solutions based on both its laser and
automation applications and special components product range.
Market outlook
Demand for laser and automation applications is expected to increase as the
economic upswing puts investment activity back on track. The outlook is good
especially in North America. Rising labor costs, especially in China, are also
contributing to the increasing need for production process automation and thus
demand for automation products. Labor costs have risen tens of percent in
China's industrial areas during the last few years, and this development is
expected to continue over the coming years. However, the global financial
recession will occasionally slow down the realization of significant new
investments. However, Cencorp's services related to the life cycle management
of production processes can mitigate the transfer from manual to automated
processes without significant one-off investments.
Dependence on the telecom market in the special components business decreased
significantly in 2011, and the same development has continued in 2012. The
growth outlook for other flexible circuits, important for Cencorp, such as RFID
antennas, is also positive. Cencorp has also signed its first remarkable
customer agreement for delivering NFC (Near Field Communication) antennas. NFC
antennas are expected to increase Cencorp's net sales already during the last
quarter of this year and to compensate the continued decrease in the demand of
flexible antennas.
Net sales and result
The Group's net sales, EUR 5.7 million, remained at the same level as in 2011
(EUR 5.7 million). The Group's net sales were improved by the good net sales
development in the Special Components segment. However, the net sales of the
Laser and Automation Applications segment decreased.
EBITDA, EUR 0.4 million (EUR -1.4 million), was back in the black. In addition,
the Group's operating result, EUR -0.5 million (EUR -2.3 million), improved,
but remained negative. EBITDA and operating result include a non-recurring
sales profit following the sale of the plant building. The operating result of
the Laser and Automation Applications segment remained negative, even though
year-on-year profitability improved slightly.
The Group's result before taxes amounted to EUR -1.0 million (EUR -3.0
million). The result for the reporting period was EUR -1.0 million (EUR -3.0
million).
Earnings per share were EUR -0.003 (-0.01) and diluted earnings per share EUR
-0.003 (-0.01).
Significant orders received during the reporting period
In January 2012, Cencorp signed a significant framework agreement on the supply
of flexible circuits for renewable energy applications. The value of the
agreement may amount to over EUR 50 million over three years. The parties to
the framework agreement have agreed on the terms and conditions of the deal and
production volume estimates that will not be binding on the buyer for
2012-2014. The deliveries are estimated to start during the last quarter of
this year. The market for these new types of circuits is expected to grow
significantly in the next few years. Cencorp believes that it will lead the way
in delivering this kind of solutions and it has a possibility to become a
market leader.
In February 2012, Cencorp signed an agreement on the delivery of a third
production line to a European company operating in the electronics industry.
Two similar production lines were delivered to the same company during 2011.
The value of the deal signed in February is approximately EUR 0.7 million, and
the value of the both deals signed earlier were EUR 0.6 million.
Financing
Cash flow from business operations before investments was EUR 1.3 million (EUR
1.5 million). Trade receivables at the end of the year were EUR 4.6 million
(EUR 5.8 million). Net financial items amounted to EUR 0.5 (EUR 0.7 million).
At the end of March, the equity ratio was 55.5 percent (54.1%) and equity per
share was EUR 0.05 (EUR 0.06). At the end of the reporting period, the Group's
liquid assets totaled EUR 0.5 million (EUR 3.3 million), and unused export
credit limits, bank guarantee limits and factoring loans amounted to EUR 2.2
million (EUR 1.5 million).
Cencorp's auditor has in the Auditors Report provided a so-called Emphasis of
Matter, concerning the company's financing position. In the Emphasis of Matter,
the auditor states the following:
'Emphasis of Matter
Without qualifying our opinion, we draw attention to the basis of preparation
of the financial statements and to Note 28: Financial risk management. The
financial statements have been prepared under the going concern assumption. The
continuity of operations requires the company to be able to obtain
supplementary funding and to negotiate changes to the terms of payment during
2012. The company has initiated discussions with its major financiers and
shareholders on measures to strengthen the financing position until the
company's cash flow is expected to return to positive. The company believes
that these measures will secure the sufficiency of working capital for the next
twelve (12) months. However, should the company fail to arrange financing, it
is possible that the company will not be able to realize its assets and repay
its liabilities within usual business operations to a sufficient extent or
quickly enough. This would jeopardize the company's operations in their current
form.'
In Cencorp's view, the company's financing position will remain challenging,
but the situation has improved since the end of 2011 and the publication of the
financial statement release on 17 February 2012 as a result of the following
measures, through which Cencorp believes that the company has secured
sufficient working capital for the next twelve months:
-The Extraordinary General Meeting authorized in its meeting on 30 January 2012
the Board of Directors to decide on share issues, share options and other
share-entitling rights referred to in Chapter 10, Section 1 of the Limited
Liability Companies Act. The Board justified the granting of the authorization
with potential need for additional financing, for example for investments and
working capital, with the use of equity derivatives and instruments for
corporate transactions and incentive systems. This authorization gives the
Board of Directors the possibility to act quickly if required, for example, to
finance investments and to increase working capital through equity
arrangements.
-The company has initiated discussions with its major financiers and
shareholders on measures to strengthen the financing position until the
company's cash flow is expected to return to positive.
-Cencorp announced on 28 March 2012 that its Chinese subsidiary Savcor Face
(Beijing) Technologies Co., Ltd carried out a sale-leaseback of its plant
building in Beijing with a real-estate investor in the amount of RMB 38.5
million, i.e. around EUR 4.7 million. The company will recognize a gain of
approximately EUR 1.1 million on the real estate transaction. Cencorp used the
consideration received for the property to repay the Bank of China a loan of
RMB 32 million, i.e. some EUR 3.9 million.
-Cencorp announced on 31 December 2011 that the maturity of a loan of
approximately EUR 1.2 million from Savcor Group Oy, the company's main owner,
will be extended to 30 June 2012.
-Cencorp announced on 30 March 2012 that it had been notified by the Australian
company Savcor Group Ltd that the due date for the unpaid share of around EUR
560,000 of the purchase price for the Face (Telecom) corporate transaction will
be extended to 30 April 2013.
-On 31 January 2012, Cencorp announced that the company has agreed with AC
Finance BV, a subsidiary of Ahlström Capital Oy, on transferring the maturity
of a loan of one million euro from the end of January to 30 June 2012.
Cencorp's main shareholder Savcor Group Oy has announced that is has acquired
AC Capital's subsidiary AC Invest B.V. The acquired company owned approximately
five percent of Cencorp Corporation's shares and a loan of EUR one million
given earlier to Cencorp. Later on Savcor Group Oy has committed to extend
Cencorp's loan until April 2013 if Cencorp's financial situation so requires.
Product development
The Group's product development costs during the January-March period amounted
to EUR 0.5 (0.5) million or 8.0 (8.0) percent of net sales.
Investments
Gross investments during the reporting period amounted to EUR 0.4 million (EUR
0.5 million). The largest investments were EUR 0.2 million in machinery and
equipment and EUR 0.2 million in development costs.
Segment information
Laser and Automation Applications
Net sales of the Laser and Automation Applications segment in the January-March
period decreased by 25 percent to EUR 2.5 million (EUR 3.4 million). The
decline in net sales resulted from the uncertainty in the global economy, which
led to investments being deferred and weakened demand for laser and automation
equipment. The segment accounted for 45 percent of the Group's net sales.
The operating result of the Laser and Automation Applications segment in the
January-March period was EUR -0.8 million (EUR -0.9 million). Weak net sales
development kept the operating result further in the red.
Special Components
Net sales of the Special Components segment in the first quarter of 2012 grew
by 31 percent to EUR 3.1 million (EUR 2.4 million). The net sales increased
especially as a result of successful launching of a decoration application for
a key customer operating in telecommunication business. The segment accounted
for 55 percent of the Group's net sales.
The segment's operating result in the first quarter was EUR 0.2 million (EUR
-1.4 million). The operating result includes a non-recurring sales profit of
EUR 1.1 million following the sale of the plant building.
PERSONNEL
During the period under review, the Group employed an average 333 (357) people,
66 of whom worked in Finland, 254 in China and 13 in other countries. During
the reporting period, salaries and fees totalled EUR 1.6 million (EUR 1.7
million).
Mats Eriksson, Cencorp Corporations President and CEO, resigned from Cencorp at
the beginning of April. Iikka Savisalo, Cencorp's CFO, was appointed the new
President and CEO as of 3 April 2012. He also continues as a member of the
Board of Directors of Cencorp. Seija Kurki took over as the company's new CFO
and the member of the management team of Cencorp.
Anssi Jansson, Vice President, Sales & Marketing and a member of Cencorp
Corporations management team, continues working at Cencorp, contrary to the
announcement made on 1 December 2011. He continues in his position as Vice
President, Sales & Marketing until a new employee takes over the position.
Thereafter he will take on the position of Executive Vice President, Corporate
Service Business.
Matti Paasila, Vice-Chairman of Cencorp's Board of Directors, announced on 2
February 2012 that he will resign from the Board of Directors for personal
reasons. Ismo Rautiainen, MSc (Econ), eMBA, was elected as the new
Vice-Chairman.
The temporarily lay-offs concerning Cencorp's personnel in Finland, started in
the autumn 2011, were discontinued in January 2012.
SHARES AND SHAREHOLDERS
Cencorp's share capital amounts to EUR 3,425,059.10. The number of shares is
342,161,270. The company has one series of shares, which confer equal rights in
the company. Cencorp did not own any of its own shares at the end of the
financial year.
The company had a total of 4,486 shareholders at the end of March, and 45.1
percent of the shares were owned by foreigners. The ten largest shareholders
held 89.7 percent of the company's shares and voting rights on 31 March 2012.
The largest shareholders on 31 March 2012:
Shares Votes
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1. SAVCOR GROUP LIMITED 133,333,333 39.0
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2. SAVCOR GROUP OY 119,235,078 34.8
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3. AC INVEST BV 17,499,999 5.1
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4. KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ETERA 16,394,735 4.8
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5. GASELLI CAPITAL OY 11,000,000 3.2
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6. PAASILA MATTI 2,777,777 0.8
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7. GASELLI CAPITAL PARTNERS OY 2,050,000 0.6
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8. JOKELA MARKKU 1,987,519 0.6
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9. PARPOLA VILLE 1,478,759 0.4
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10. FT CAPITAL OY 1,428,570 0.4
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OTHERS 34,975,500 10.3
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TOTAL 342,161,270 100.0
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Savcor Group Oy announced on 20 April 2012 that it has acquired AC Capital's
subsidiary AC Invest B.V. who owned approximately 5.1 percent of Cencorp
Corporation's shares, resulting in Savcor Group Oy's ownership in Cencorp
Corporation increasing into 39.9 percent.
The members of the Board of Directors and the President and CEO, either
directly or through companies under their control, held a total of 252,568,411
shares in the company on 31 March 2012, representing about 73.82 percent of the
company's shares and voting rights. The company's President and CEO Iikka
Savisalo, appointed on 3 April 2012, held 252,568,411 shares in the company at
the end of the period.
The price of Cencorp's share varied between EUR 0.07 and EUR 0.12 during the
January-March period. The average price was EUR 0.10, and the closing price at
the end of March EUR 0.08. A total of 9.5 million Cencorp shares were traded at
a value of EUR 0.9 million in the reporting period. The company's market
capitalization at the end of March stood at EUR 27.4 million.
No share options were granted to the company's management during the reporting
period. On 31 March 2012, the company had 8,931,000 options connected to bond
I/2010 with a subscription period ending on 25 May 2015. Savcor Group Oy holds
the options connected to bond I/2010. No 2006C series options have been
allocated and Cencorp Group continues to hold them.
EXEMPTION PERMIT FROM THE FINNISH FINANCIAL SUPERVISORY AUTHORITY
At the beginning of April, the Finnish Financial Supervisory Authority granted
Cencorp an exemption permit to deviate from the deadline of the disclosure of
the Financial Statement, Report of the Board of Directors and the Auditors
Report, pursuant to the Finnish Securities Market Act. The exemption permit is
related to the delay of the disclosure of the company's Auditors Report,
published on 30 March 2012.
On 4 April 2012, Cencorp received Auditor's Report concerning its financial
statement, and published it at the same day, together with the Financial
Statement and Report of the Board of Directors. The Auditor's Report
corresponds the draft version which was published on 29 March 2012. The
Auditors Report includes a so-called Emphasis of Matter, concerning the
company's financing position. More information on the Emphasis of Matter is
available in the item Financing of this Interim Report.
DECISIONS BY THE ANNUAL GENERAL MEETING
Cencorp Corporation's Annual General Meeting was held on 19 April 2012 in
Mikkeli, Finland. The AGM approved the 2011 financial statements and discharged
the members of the Board and the President and CEO from liability for the
financial year 2011. According to the Board' proposal, it was decided that no
dividend for the financial year 2011 will be distributed. It was also decided
that the loss for the financial period that ended on 31 December 2011 will be
entered in retained earnings.
The AGM elected Hannu Savisalo, Iikka Savisalo and Ismo Rautiainen as the
members of the Board of Directors of Cencorp Corporation.
At its organizing meeting following the AGM, Cencorp's Board of Directors
elected Hannu Savisalo as the Chairman and Ismo Rautiainen as the Vice Chairman
of the Board. The Board of Directors decided, due to the scope of the company's
business, that it is not necessary to establish any separate Board committees.
The Board of Directors further stated that Ismo Rautiainen is independent of
the company and also of the company's significant shareholders.
The AGM decided that an annual remuneration of EUR 40,000 will be paid to the
Chairman and to the Vice Chairman of the Board, and EUR 30,000 to the members
of the Board of Directors.
Ernst & Young Oy, Authorized Public Accounting Firm, continues as the company
auditor and Mikko Rytilahti, APA, as the responsible auditor.
DECISIONS OF THE EXTRAORDINARY GENERAL MEETING
Cencorp Corporation's Extraordinary General Meeting held on 30 January 2012
authorized the Board of Directors to decide on a share issue, share options and
other share-entitling rights referred to in Chapter 10, Section 1 of the
Companies Act, in one or more instalments. The total number of shares issued
under the authorization may not exceed 100,000,000 shares. The Board of
Directors is authorized to decide on all terms and conditions of share issues
and other share-entitling rights. The Board of Directors is authorized to grant
directed issues and share-entitling rights. The authorization shall remain
valid until further notice, but for no longer than five years from the decision
by the General Meeting.
SHARE ISSUE AUTHORIZATIONS IN FORCE
1,069,000 shares remain under the authorization given by Cencorp's Annual
General Meeting on 28 April 2009 to issue 10,000,000 new shares in Cencorp.
Cencorp's Extraordinary General Meeting held on 30 January 2012 decided to
authorize the Board of Directors to issue 100,000,000 new shares.
RISK MANAGEMENT, RISKS AND UNCERTAINTIES
Cencorp's Board of Directors is responsible for the control of the company's
accounts and finances. The Board is responsible for internal control, while the
President and CEO handles the practical arrangement and monitors the efficiency
of internal control. Business management and control are taken care of using a
Group-wide reporting and forecasting system.
The purpose of risk management is to ensure that any significant business risks
are identified and monitored appropriately. The company's business and
financial risks are managed centrally by the Group's financial department, and
reports on risks are presented to the Board of Directors as necessary.
Due to the small size of the company and its business operations, Cencorp does
not have an internal auditing organization or an audit committee.
The sufficiency of the company's financing and working capital involve risks
that are handled in more detail in the item Financing of this financial
statement release.
As it is difficult to make forecasts in an industry that is dependent on
economic cycles, the biggest business risks are related to fluctuations in the
demand for products and to the adjustment of operations to meet demand.
In terms of profitability, the most essential risks are related to the
achievement of a sufficient invoicing volume in both business segments and the
success achieved with the programs underway at Cencorp to improve
profitability, such as improvements in productivity and business flexibility
through outsourcing production.
In terms of operations, the biggest risks are related to outsourcing in-house
equipment production to contract manufacturers, in particular to whether the
production chain efficiency targets are achieved as planned.
Other risks connected to Cencorp have been presented in more detail in the
Annual Report for 2011 and in the base prospectus and its notes published on 25
October 2010.
MAJOR EVENTS AFTER THE FINANCIAL YEAR
New strategy and adjustments to operations
Cencorp's new strategy, published in April, bases on extensive knowledge of
automated handling of small pieces and on long experience on customers'
automation needs, systems and equipment. Today Cencorp has good theoretical
knowledge also of laser and its applications for machining plastics as well as
of vacuum coatings.
Company's main business operations consist of:
1. The development of clean technology applications in cooperation with the
customers
The ongoing application development today involves renewable energy, fuel cells
and LED-technology.
2. Life cycle management of laser and automation systems and equipment
Special attention will be given for customer service through improving and
strengthening maintenance operations and other after sales activities. Cencorp
has delivered more than 2,000 automation installations to the leading
electronics manufactures especially in North America and Central Europe.
Existing good customer relations create a solid base for the new strategy.
The main development focus will be especially on software that relates to laser
and automation applications and equipment. The software will create the
customer added value, for example through integration into customers' materials
management and maintenance IT-systems. This kind of software systems have
already been delivered to some key customers.
1. A separate profit centre will be formed to sell stand alone equipment. That
business unit will cooperate closely with the independent manufacturing
partners. Close and mutual product development between Cencorp and its
development and manufacturing partners will be increased. Long-term commitment
with the partners may be further deepened with minority shareholding
arrangements.
2. Reel-to-reel manufacturing of flexible circuits in Beijing, China, is an
important part of the Special Components segment. Flexible circuits comprehend
for example RFID (Radio Frequency Identification) and mobile phone antennas
including so called NFC (Near Field Communication) antennas and LED lights
related products. Development is focused especially on products and services
that require laser technology in downstream operations of flexible circuits.
The components for the renewable energy application project, that was earlier
published, are manufactured also in Beijing.
3. Metallization of electronic equipment components by vacuum coating in China
will remain in an essential role in the Special Component segment. This
so-called electromagnetic shielding (EMI-shielding, EMC-shielding) isolates
radiating components from interfering with each other and prevents external
radiation from affecting equipment functionalities.
According to the new strategy, Decoration Operations located in Guangzhou China
are no longer part of Cencorp's core business. To be able to focus on its core
business, the company has started negotiations to find a strategic partner in
the decoration operations. Alternatively Cencorp investigates different options
to exit from the decoration business.
In the Special Components segment (the current operations in China), the
company is aiming for growth with strategic customer partnerships, especially
in manufacturing of flexible circuits, fuel cells and components for renewable
energy technologies. The company sets a strong focus in this segment on winning
new customers and establishing its technologies in new customer industries.
The company's target is together with its subcontracting partners to
concentrate its research and development investments in bringing new
innovations and products into market better and faster than earlier.
Additionally, Cencorp aims to grow with strategic partnerships and arrangements
related to product design and manufacturing.
Cencorp is planning to adjust its operations to meet the requirements of the
new strategy published. Cencorp needs to strengthen its competitiveness and to
create a solid base for its long-term profitable growth.
The company has decided to investigate the possibilities to rearrange
production and other operations in Salo and Mikkeli to improve profitability,
cost structure and competitiveness. As a part of this process, the company is
investigating options to fully outsource the equipment manufacturing and its
support functions as well as the possibilities to outsource part of its
engineering operations. Additionally, the company's operations and business
premises in Salo, Mikkeli and other locations in Finland will be considered.
Restructuring of Cencorp Group's foreign units will be started.
With the restructuring, Cencorp is pursuing annual savings in Finland of
approximately EUR 2.0 million in fixed and operative costs.
To adjust its operations Cencorp starts statutory negotiations in all its
offices in Finland based on production-related and financial grounds and on
grounds related to the restructuring of the operations. The statutory
negotiations will include all Cencorp employees in Finland excluding its
service and sales operations but including the support functions of the service
and sales. The estimate of reduction in labor is a maximum of 25 employees.
Flagging notification
On 24 April 2012, Cencorp Corporation gained knowledge of the disclosure
notification of Ahlström Capital Oy pursuant to Chapter 2, Section 9 of the
Finnish Securities Markets Act. In accordance with the disclosure notification,
the ownership of Ahlström Capital Oy in Cencorp has fallen below one-twentieth
of all shares of Cencorp as Ahlström Capital Oy has sold all shares in its
Dutch subsidiary, AC Invest B.V. (change of trade name pending), which held
Cencorp's shares, to Savcor Group Oy. After the sale Ahlström Capital Oy or
companies belonging to the same group of companies with it do not hold any
shares in Cencorp. The sale is not subject to any conditions.
The share of ownership of Ahlström Capital Oy in Cencorp's shares and attached
voting rights was 17,499,999 shares which was approximately 5.1 per cent of all
shares and attached voting rights in Cencorp.
Ahlström Capital Oy has notified that it has agreed in connection with the sale
of shares referred to above on such an arrangement for security that in the
event of breach of the payment terms, Ahlström Capital Oy has, among other
things and subject to certain conditions based on its own consideration, right
to notify of using the voting rights attached to the pledged Cencorp shares. In
such an event, Ahlström Capital Oy would, when necessary, make a separate
disclosure notification pursuant to the requirements of the Finnish Securities
Markets Act.
OUTLOOK FOR 2012
The economic cycles in the global markets have a significant impact on demand
for laser and automation equipment. Even though the year has started off with a
moderately positive market outlook, it is uncertain whether the situation will
remain positive throughout the year. The demand for special components will
greatly depend on when the mass production for the deliveries according to the
framework agreement related to renewable energy disclosed by Cencorp on 23
January 2012 will start. The value of the agreement may amount to over EUR 50
million over three years. The parties to the framework agreement have agreed on
the terms and conditions of the deal and production volume estimates that will
not be binding on the buyer for 2012-2014. The shift that is taking place in
the mobile phone sector in general may also positively affect the demand for
the special components manufactured by Cencorp.
Despite the uncertain economic situation, Cencorp estimates its net sales to
increase compared to 2011 and the full-year EBITDA is estimated to be positive
provided that no essential change takes place in the operating environment or
in the current economic outlook.
In Mikkeli, on 8 May 2012
Cencorp Corporation
BOARD OF DIRECTORS
Statement of Consolidated Comprehensive Income
(unaudited)
1 000 EUR 1-3/2012 1-3/2011 1-12/2011
--------------------------------------------------------------------------------
Net sales 5 658 5 731 26 465
Cost of sales -5 739 -6 248 -25 977
------------------------------------------------------------------
Gross profit -80 -517 488
Other 1 306 49 243
operating
income
Product -453 -460 -1 642
development
expenses
Sales and -477 -499 -2 335
marketing
expenses
Administrativ -792 -860 -3 607
e expenses
Other -20 -2 -160
operating
expenses
Operating -516 -2 288 -7 014
profit
Financial 249 324 1 701
income
Financial -774 -990 -2 197
expenses
Profit before -1 040 -2 954 -7 510
taxes
Income taxes 24 -5 -6
Profit/loss -1 016 -2 959 -7 516
for the
period
==================================================================
Profit/loss
attributable
to:
Shareholders -1 016 -2 959 -7 516
of the
parent
company
Earnings/shar -0,003 -0,01 -0,02
e (basic),
eur
Earnings/shar -0,003 -0,01 -0,02
e (diluted),
eur
Other
comprehensiv
e income
Translation -260 -579 794
difference
Other 0 0 0
comprehensiv
e income
Total -1 276 -3 538 -6 721
comprehensiv
e income for
the year
==================================================================
Total
comprehensiv
e income
attributable
to:
Shareholders -1 276 -3 538 -6 721
of the
parent
company
Consolidated Balance
Sheet
(unaudited)
1 000 EUR 31.3.2012 31.3.2011 31.12.2011
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and 12 877 16 080 16 305
equipment
Consolidated 2 967 2 967 2 967
goodwill
Other intangible 3 335 3 406 3 337
assets
Available-for-sale 10 10 10
investment
Total non-current 19 198 22 463 22 629
assets
-----------------------------------------------------------
Current assets
Inventories 3 842 4 942 4 184
Trade and other 5 842 8 379 7 402
non-interest-bearin
g receivables
Cash and cash 539 3 252 317
equivalents
Total current assets 10 223 16 572 11 903
-----------------------------------------------------------
Total assets 29 420 39 035 34 532
EQUITY AND
LIABILITIES
Equity attributable to shareholders of the parent
company
Share capital 3 425 3 425 3 425
Other reserves 43 344 43 344 43 344
Translation 324 -790 584
difference
Retained earnings -30 751 -25 091 -29 735
Total equity 16 342 20 888 17 618
-----------------------------------------------------------
Non-current
liabilities
Non-current loans 520 2 687 0
Deferred tax 26 61 34
liabilities
Total non-current 546 2 748 34
liabilities
-----------------------------------------------------------
Current liabilities
Current 4 120 5 186 8 475
interest-bearing
liabilities
Trande and other 8 158 10 109 8 196
payables
Current provisions 255 104 209
Total current 12 533 15 399 16 880
liabilities
-----------------------------------------------------------
Total liabilities 13 079 18 147 16 914
Equity and 29 420 39 035 34 532
liabilities total
Consolidated Cash
Flow Statement
(unaudited)
1 000 EUR 1-3/2012 1-3/2011 1-12/2011
--------------------------------------------------------------------------------
Cash flow from operating
activities
Income statement -1 016 -2 959 -7 516
profit/loss
Non-monetary items adjusted
on income statement
--------------------------------------------------------------------------------
Depreciation and + 936 921 3 949
impairment
Gains/losses on +/- -1 143 0 88
disposals of
non-current assets
Unrealized exchange +/- 294 395 -507
rate gains (-) and
losses (+)
Other non-cash +/- 0 0 62
transactions
Financial income + 231 270 1 003
and expense
Taxes - -24 5 6
-------------------------------------------
Total cash flow before -723 -1 367 -2 915
change in working capital
-------------------------------------
Change in working capital
Increase (-) / 252 -166 520
decrease (+) in
inventories
Increase (-) / decrease (+) 1 420 1 763 1 957
in trade and other
receivables
Increase (+) / 490 1 549 -524
decrease (-) in
trade and other
payables
-------------------------------------------
Change in working capital 2 162 3 146 1 953
-------------------------------------
Adjustment of financial items and taxes to cash-based
accounting
Interest paid - -92 -88 -429
Interest received + 1 1 14
Other financial - -31 -125 -397
items
Taxes paid - 16 -83 -120
--------------------------------------------------------------------------------
Financial items and taxes -106 -294 -932
NET CASH FLOW FROM BUSINESS 1 333 1 484 -1 894
OPERATIONS
CASH FLOW FROM INVESTING
ACTIVITIES
Investments in tangible and - -469 -536 -1 424
intangible assets
Proceeds on disposal of + 3 605 0 70
tangible and intangible
assets
Repayment of loan + 0 0 1 468
receivables
NET CASH FLOW FROM 3 136 -536 114
INVESTMENTS
CASH FLOW FROM FINANCING
ACTIVITIES
Proceeds from share issue + 0 998 862
Proceeds from current + 905 2 388 10 083
borrowings
Repayment of current - -5 204 -2 616 -10 244
borrowings
Dividends paid - 0 0 -4
--------------------------------------------------------------------------------
NET CASH FLOW FROM -4 300 770 697
FINANCING ACTIVITIES
INCREASE (+) OR DECREASE 169 1 718 -1 083
(-) IN CASH FLOW
Statement of Changes in
Equity
(unaudite
d)
1 000 EUR Share Other Translation difference Distribu- Retaine Total
capital reserve table d
s non-restr earning
icted s
equity
fund
--------------------------------------------------------------------------------
31.12.201 3 425 4 908 584 38 436 -29 735 17 618
1
Directed 0
issue
Decrease 0
from
share
issue
Direct 0
entries
in
retained
earnings
Translati -260 -260
on
differen
ce,
comprehe
nsive
income
Profit/lo -1 016 -1 016
ss for
the
period
31.3.2012 3 425 4 908 324 38 436 -30 751 16 342
1 000 EUR Share Other Translation difference Distribu- Retaine Total
capital reserve table d
s non-restr earning
icted s
equity
fund
--------------------------------------------------------------------------------
31.12.201 3 425 4 908 -210 35 104 -22 082 21 145
0
Directed 3 332 3 332
issue
Decrease -41 -41
from
share
issue
Direct -10 -10
entries
in
retained
earnings
Translati -579 -579
on
differen
ce,
comprehe
nsive
income
Profit/lo -2 959 -2 959
ss for
the
period
31.3.2011 3 425 4 908 -790 38 436 -25 091 20 888
Segment
information
(unaudited)
The Group has two reporting segments: Laser and Automation Applications, and
Special Components. The Laser and Automation Applications segment comprises
Cencorp's former business and the Special Components segment the business
acquired through the Face transaction in 2010. The segment information
presented by the Group is based on the management's internal reporting and the
organisational structure.
1 000 EUR 1-3/2012 1-3/2011 1-12/2011
---------------------------------------------------------------------------
Net sales
Laser and 2 527 3 352 15 099
Automation
Applications
Special 3 133 2 390 11 439
Components
Elimination -2 -12 -73
s
Total 5 658 5 731 26 465
Operating profit
Laser and -750 -891 -2 497
Automation
Applications
Special 237 -1 421 -4 468
Components
Elimination -2 23 -49
s
Total -516 -2 288 -7 014
EBITDA
Laser and -571 -611 -1 263
Automation
Applications
Special 993 -780 -1 753
Components
Elimination -2 23 -49
s
Total 420 -1 367 -3 065
Profit/loss for
the period
Laser and -905 -1 148 -2 949
Automation
Applications
Special -73 -1 842 -4 658
Components
Elimination -38 31 92
s
Total -1 016 -2 959 -7 516
Assets
Laser and 30 016 33 503 30 611
Automation
Applications
Special 21 497 25 173 25 962
Components
Elimination -22 093 -19 641 -22 040
s
Total 29 420 39 035 34 532
Liabilities
Laser and 9 230 9 950 8 965
Automation
Applications
Special 11 130 13 180 15 174
Components
Elimination -7 281 -4 983 -7 225
s
Total 13 079 18 147 16 914
Investments
Laser and 42 206 729
Automation
Applications
Special 405 273 463
Components
Elimination 0 58 0
s
Total 446 536 1 191
Depreciation
Laser and 180 280 977
Automation
Applications
Special 756 641 2 538
Components
Elimination 0 0 0
s
Total 936 921 3 515
Impairment
Laser and 0 0 257
Automation
Applications
Special 0 0 177
Components
Elimination 0 0 0
s
Total 0 0 434
Key Figures
(unaudited)
1 000 EUR 1-3/2012 1-3/2011 1-12/2
011
--------------------------------------------------------------------------------
Net sales 5 658 5 731 26 465
Operating profit -516 -2 288 -7 014
% of net sales -9,1 -39,9 -26,5
EBITDA 420 -1 367 -3 065
% of net sales 7,4 -23,9 -11,6
Profit before taxes -1 040 -2 954 -7 510
% of net sales -18,4 -51,5 -28,4
Balance Sheet value 29 420 39 035 34 532
Equity ratio, % 55,5 54,1 51,2
Net gearing, % 25,1 22,1 46,3
Gross investments 446 497 1 191
% of net sales 7,9 8,7 4,5
Research and development costs 453 460 1 642
% of net sales 8,0 8,0 6,2
Order book 4 286 7 356 2 793
Personnel on average 333 357 343
Personnel at the end of the period 330 348 328
Non-interest-bearing liabilities 8 158 10 109 8 196
Interest-bearing liabilities 4 639 7 873 8 475
Share key indicators
Earnings/share (basic) -0,003 -0,01 -0,02
Earnings/share (diluted) -0,003 -0,01 -0,02
Equity/share 0,05 0,06 0,05
P/E ratio -26,94 -14,00 -4,02
Highest price 0,12 0,20 0,20
Lowest price 0,07 0,12 0,07
Average price 0,10 0,15 0,12
Closing price 0,08 0,14 0,09
Market capitalisation, at the end of 27,4 47,9 30,8
the period, MEUR
Calculation of Key Figures
EBITDA, %: Operating profit + depreciation +
impairment
----------------------------------------
Net sales
Equity ratio, %: Total
equity x
100
----------------------------------------
Total assets - advances
received
Net gearing, %: Interest-bearing liabilities - cash and
cash equivalents
and marketable securities x 100
----------------------------------------
Shareholders' equity + minority
interest
Earnings/share (EPS): Profit/loss for the period to the owner
of the parent company
----------------------------------------
Average number of shares adjusted for
share issue
at the end of the financial
year
Equity/share: Equity attributable to shareholders of
the parent company
----------------------------------------
Undiluted number of shares on the
balance sheet date
P/E ratio: Price on the balance sheet date
----------------------------------------
Earnings per share
Change in intangible and tangible assets
(unaudited)
1 000 EUR 31.3.2012 31.3.2011 31.12.2011
--------------------------------------------------------------------------------
Includes tangible assets, consolidated
goodwill and other intangible assets
Carrying amount, beginning of period 22 609 23 835 23 835
Depreciation and impairment -936 -921 -3 516
Additions 446 497 1 191
Disposals -2 422 0 -158
Exchange rate difference -520 -958 1 256
Carrying amount, end of period 19 178 22 453 22 609
Commitments and contingent liabilities
(unaudited)
1 000 EUR 31.3.20 31.3.2011 31.12.2011
12
--------------------------------------------------------------------------------
Loans from financial institutions 1 151 5 281 5 206
Promissory notes secured by pledge 12 691 12 691 12 691
Mortgages on real estate 0 4 747 5 413
Deposits 0 537 0
Factoring loan and export credit limit 532 1 037 833
Trade receivables 532 1 686 833
Promissory notes secured by pledge 12 691 12 691 12 691
Operating leases
Payable within one year 58 21 60
Payable over one year 74 3 83
Commitments
Payable within one year 1 438 741 786
Payable over one year 11 041 4 718 4 320
For more information, please contact:
President and CEO Iikka Savisalo, tel. +358 40 521 6082,
iikka.savisalo@cencorp.com
Cencorp Corporation's Interim Report January-June 2012 will be published on
Tuesday 21 August 2012.
News Source: NASDAQ OMX
08.05.2012 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
---------------------------------------------------------------------------
Language: English
Company: Cencorp
Finland
Phone:
Fax:
E-mail:
Internet:
ISIN: FI0009006951
WKN:
End of Announcement DGAP News-Service
---------------------------------------------------------------------------
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